PHILIPSBURG--Minister of Economic Affairs Stuart Johnson has announced that the Department of Statistics STAT has a modernised methodology and system to produce better quality price indices and detailed microdata.
“The new basket contains new products that are relevant on the market now that were not on the scene in the previous basket,” he said on Sunday.
With the new system, which was introduced in 2018, STAT can now use internationally recognised product classifications and can seamlessly compare each year’s basket of goods.
However, the indexation of the minimum wage is a policy-level decision which is usually taken at the Ministry of Public Health, Social Development and Labour VSA and is not specified by a National Ordinance as is the case for the old-age pension AOV.
“In recognising the concerns of some members of the community, the [Ministry of Tourism, Economic Affairs, Transport and Telecommunication – Ed.] TEATT will participate in a scheduled task-force meeting this week and will assist in coming to a solution with the VSA Ministry regarding this matter collectively,” said Johnson.
He said he has taken “due” note of the concerns brought forward by the St. Maarten Anti-Poverty Platform and the St. Maarten Consumers Coalition regarding the social implications of, in particular, no indexation of the AOV/AWW pensions for 2019.
Regarding the basket of goods, Johnson said many unit sizes of different products such as rice, toothpaste and other items listed in the old basket of goods cannot be directly compared with the items from the new 2018 basket, because these may have a bigger or smaller unit measurement and the price change cannot be compared at face value.
These incompatibilities, coupled with the small team of analysts working on this project, led to a management decision to focus all efforts on getting the much-needed new consumer price index (CPI) system up and running, rather than attempt to make a complicated and possibly faulty comparison between the new CPI system and the outdated system used from 2006 to 2017.
To rectify this problem permanently the decision was for STAT not to publish a CPI during 2018, which Johnson said he “supports in the interest of an accurate reading of the basket of goods.”
He said the cost of living is something the governing programme of the St. Maarten United Democratic Coalition has as “a priority item” to address, “and accurate information is the key to the government being able to make decisions that benefit the people.
The National Ordinances AOV and AWW stipulate that an annual indexation takes place based on increases in the CPI in August of the previous year compared to the same period the year before.
“TEATT recognises the inconvenience this absence of official 2018 CPI figures has caused. However, this move was unavoidable.
“The department started taking steps in this direction quite a few years ago, and had already decided before Hurricane Irma in 2017 that, based on its progress up to that time, the new base year for CPI calculations would be 2018. As a result, prices were collected in all months of 2018 according to the updated consumer basket of goods and services which is now considered as the new basis – or starting point – to compare prices going forward,” Johnson said.
